Comparing SUMITOMO CHEMCL (OTCMKTS:SOMMY) & Air Products and Chemicals (NYSE:APD)

SUMITOMO CHEMCL (OTCMKTS:SOMMY) and Air Products and Chemicals (NYSE:APD) are both basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.

Volatility and Risk

SUMITOMO CHEMCL has a beta of 0.25, indicating that its share price is 75% less volatile than the S&P 500. Comparatively, Air Products and Chemicals has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Institutional & Insider Ownership

81.7% of Air Products and Chemicals shares are held by institutional investors. 0.4% of Air Products and Chemicals shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares SUMITOMO CHEMCL and Air Products and Chemicals”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SUMITOMO CHEMCL	$17.12 billion	0.31	$254.70 million	$0.17	92.71
Air Products and Chemicals	$12.10 billion	4.89	$3.83 billion	$6.95	38.23

Air Products and Chemicals has lower revenue, but higher earnings than SUMITOMO CHEMCL. Air Products and Chemicals is trading at a lower price-to-earnings ratio than SUMITOMO CHEMCL, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for SUMITOMO CHEMCL and Air Products and Chemicals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SUMITOMO CHEMCL	0	0	0	0	0.00
Air Products and Chemicals	1	4	11	1	2.71

Air Products and Chemicals has a consensus target price of $335.07, suggesting a potential upside of 26.09%. Given Air Products and Chemicals’ stronger consensus rating and higher possible upside, analysts clearly believe Air Products and Chemicals is more favorable than SUMITOMO CHEMCL.

Profitability

This table compares SUMITOMO CHEMCL and Air Products and Chemicals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SUMITOMO CHEMCL	0.35%	0.80%	0.25%
Air Products and Chemicals	12.86%	15.11%	6.79%

Dividends

SUMITOMO CHEMCL pays an annual dividend of $0.28 per share and has a dividend yield of 1.8%. Air Products and Chemicals pays an annual dividend of $7.16 per share and has a dividend yield of 2.7%. SUMITOMO CHEMCL pays out 164.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Air Products and Chemicals pays out 103.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Air Products and Chemicals has raised its dividend for 50 consecutive years. Air Products and Chemicals is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Air Products and Chemicals beats SUMITOMO CHEMCL on 16 of the 18 factors compared between the two stocks.

About SUMITOMO CHEMCL

Sumitomo Chemical Company, Limited engages in Chemicals & Plastics, energy and functional materials, IT-related chemicals, health and crop sciences, pharmaceuticals, and other businesses worldwide. Its Essential Chemicals & Plastics segment offers synthetic resins, such as polyethylene, polypropylene, and polymethyl methacrylate resins; raw materials for synthetic fibers; and various industrial chemicals. The company's Energy & Functional Materials segment provides alumina and aluminum products used for energy products; resorcinol for tires, wood adhesives, flame retardants, and ultraviolet ray absorbants; polymer additives and rubber chemicals; synthetic rubber for tires, shoes, construction materials, and other applications; and engineering plastics and lithium-ion secondary battery materials for use in electronic components and next-generation vehicles. Its IT-Related Chemicals segment provides polarizing films, touch screen sensor panels, and color resists and polymer OLED for LC and OLED displays; photoresists and high-purity chemicals for the semiconductor manufacturing process; and compound semiconductor materials for antenna switches and other components of communication terminal equipment. The company's Health & Crop Sciences segment offers crop protection chemicals, fertilizers, feed additives, and household insecticides; active pharmaceutical ingredients and intermediates; and products to control infectious diseases. Its Pharmaceuticals segment provides prescription and diagnostic pharmaceuticals. The company's Others segment supplies electric power and steam; designs, constructs, and supervises chemical plants; provides transportation and warehousing services; and conducts physical property and environmental analysis. Sumitomo Chemical Company, Limited was founded in 1913 and is headquartered in Tokyo, Japan.

About Air Products and Chemicals

Air Products and Chemicals, Inc. provides atmospheric gases, process and specialty gases, equipment, and related services in the Americas, Asia, Europe, the Middle East, India, and internationally. The company produces atmospheric gases, including oxygen, nitrogen, and argon; process gases, such as hydrogen, helium, carbon dioxide, carbon monoxide, and syngas; and specialty gases for customers in various industries, including refining, chemical, manufacturing, electronics, energy production, medical, food, and metals. It also designs and manufactures equipment for air separation, hydrocarbon recovery and purification, natural gas liquefaction, and liquid helium and liquid hydrogen transport and storage. The company was founded in 1940 and is headquartered in Allentown, Pennsylvania.